Senate Energy Committee Approves ANWR Drilling

Green Car Congress
20 October 2005

ANWR. Click to enlarge.

The Senate Energy and Natural Resources Committee on Wednesday approved legislative language instructing the Secretary of the Interior to create and implement an oil and gas leasing program in the Coastal Plain of the Arctic National Wildlife Refuge that impacts no more than 2,000 surface acres.

The legislation approved by the committee today is Title IV of the budget reconciliation bill to be marked up by the Senate Budget Committee on October 26. The committee passed Title IV in response to instructions from the Budget Committee to raise $2.4 billion in revenue for fiscal years 2006-2010. According to the Congressional Budget Office, the competitive sale of oil and gas leases in the plain will raise $2.5 billion during that time.

During the meeting over the ANWR provision, three amendments were offered and defeated.

Sen. Maria Cantwell (D-Wa), offered an amendment to ensure the payment to the US Treasury of 50% of revenues from oil and gas leasing and production on the Coastal Plain. Defeated 9–13.

Senator Ron Wyden (D-Or), offered an amendment prohibiting the exportation of oil and gas produced under ANWR leases. Defeated 10–12.

Ranking Member Jeff Bingaman (D-NM), offered an amendment to limit the authorization of oil and gas development on the Coastal Plain in the same manner as in other units of the National Wildlife Refuge System. Defeated 8–14.

The time is ripe for ANWR. Global and national conditions mandate the environmentally-sound development of oil and gas in the Arctic. The Senate first passed ANWR legislation in 1996. If that hadn’t been vetoed, I don’t think we would be paying $3 a gallon for gasoline today. The hurricanes in the Gulf underscored what Congress has known for along time: We must produce more of our own oil and we must diversify the places where we produce it. We must do it for our economy and our energy security.

—Sen. Pete Domenici (R-NM), Chair, Senate Energy and Natural Resources Committee

In March of 2004, the Energy Information Administration, at the request of Representative Richard W. Pombo, Chairman of the U.S. House Committee on Resources, published a report using government figures and analyzing—to the extent that anyone can without sinking a well shaft down through the coastal plain—the effect of drilling in ANWR.

Given the uncertainty over the exact amount of oil in place, the report lays out three scenarios: one for low-oil resources, one the mean case, the other for high oil resources.

Some of the report’s findings:

The mean-case estimate is that there are 10.4 billion technically recoverable barrels of oil in ANWR, divided into many discrete fields. This estimate includes oil resources in Native lands and State waters out to a 3-mile boundary within the coastal plain area. The mean estimated size of oil resources in the Federal portion of the ANWR coastal plain is 7.7 billion barrels.

It will take approximately 10 years to bring the first field on-line (comparable to other Arctic drilling).

Assuming sequential development of the fields, rank ordered by size, ANWR production would peak, in the mean case scenario, in 2024 at 870,000 barrels of oil per day.

Today the US imports some 10.5 million barrels per day. In 2025, the EIA estimates that almost to double to some 20 million barrels imported per day.

Using the EIA’s projections of declines in domestic oil production and increases in oil consumption (mostly from the transportation sector), by 2025 ANWR would reduce US reliance on imported oil by four percentage points—from 70% to 66%.

In other words, ANWR oil would make a small difference, but not a substantive, strategic difference. It doesn’t come close to solving the problem or providing “energy security.” Even if peak ANWR oil were available today, the US would still be importing more than 9 million barrels per day, and climbing.

As an aside, the 2,000 acres don’t need to be contiguous, and only the equipment that touches the ground (i.e., the pipeline stanchions, not the pipelines, which are in the air) count toward the figure. Since a drilling platform can occupy as little as 10 acres, there’s still the possibility of having several hundred platforms, with a maze of interconnecting roads and pipelines, spread throughout the 1.5 million acre reserve.